On January 2, 2008 I wrote the post below (after the link), hopeful that HD DVD would continue to grow at a rapid pace. Only a few short days later we were with the news of the Warner offensive. More recently, however, Steve Bass at PC World sent me into orbit with the quote:

…you’ll see that Toshiba appears to be dumping HD DVD players faster than Windows Vista users are switching to Macs.
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That quote is flawed in so many different respects. In fact the most recent numbers from NPD indicate that HD DVD gained 24% of the HD home video market in week three of January. These nubmers do not include sales from Amazon.com where the A30 is the highest ranking DVD player (including all SD DVD, HD DVD, and Blu-ray players) at #27 in electronics. I am still waiting to see the raw numbers.

So, inlight of news report like Mr. Bass’s and other retarded stories I thought I would address the differences between the VHS/Beta war and the current next gen home video market.

This war will not be won by studio support alone.

This is not the 80’s.VHS analogy is severly flawed. In the 80’s VHS and Beta had no other competition for home entertainment dollars - the war was only with those two formats. Today, the home video market is filled with competition: Video on Demand, Cable, Xbox Live, iTunes and a myriad of other sources including Chinese Pirates (aargh). Blu-ray and HD DVD have to conted with these convenience oriented retail points as well as with each other. A failure to recognize these elements could casue both formats to fail in all markets but high-end niche markets.

In order to gain market share and be the next home video format, overtaking DVD, Blu-ray and HD DVD need well more than the 4% of the home video marketshare their combined sales numbers presently possess.

HD DVD is in a position to prevail in the absense of studio support by selling HD DVD players simply as updated DVD players. That is market HD DVD players as DVD upconverting players with the capability of playing HD DVD discs at DVD player prices (which we are currently seeing). How does this work? Take my dad as an example. He is not interested in replacing his collection of 2000 DVDs for either format - but if he believes he could buy a DVD player that would upconvert and give him the option to play HD DVD movies he’d do it. Look at parents that primarily play kids movies on their DVD players - HD barely makes a difference for CGI animation or remastered Disney films. Finally, some movies, just are not well suited for HD - like romances, or “Beerfest”, and should only be released in SD for upconversion with a DolbyDigital track.

update: The NPD Group recognizes that both Blu-ray and HD DVD face still competition from upconverting DVD players. NPD analyst Ross Rubin said:

“Both camps face really strong competition from standard DVD up-converting models, which inexpensively render [consumers’] massive DVD libraries well on their TVs,” said Rubin, adding that such upconverting models can be found for sub-$100 pricing. “We’ve seen a consistent trend of the market responding to changes in price and promotion by both camps. So you’ll see a significant shift [in sales one way or the other] in response to the end of a promotion or the beginning of a new promotion.”

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Toshiba is perfectly suited to take advantage of this market - get to it lads and lasses!

While Both formats can upconvert, with HD DVD in bed with the DVD forum, HD DVD is very well suited to market their players as such. In fact with the recent call by MPEG LA for a joint license, I would not be shocked if the DVD forum make HD DVD a spec standard in all DVD players. Toshiba may have missed the marketing boat by selling HD DVD as an alternative to DVD.

The point is that a format war between the two HD movie formats is a losing battle for both as customers will opt for convenience and what they know, DVDs on their shelves and Video on Demand.

Follow the link to the original post

Originally Posted January 2, 2008:

2007 was a banner year for HD DVD as the format sold more players in its first year than DVD sold in its first year. Interest in HD DVD grew as more and more quality titles were released for the format including, Blade Runner, and the Stanley Kubrick Collection. The BD catalog has grown as well. Many bloggers are tired of the format war and think it is bad for consumers. I disagree. The competition between the two formats encourages better products (i.e.: released titles) and lower prices as BD and HD DVD fight for the top sales rank. 2008 will see more of the same.

The ‘format war’ will come to an end but not with the result most people will think. Ultimately I do not think the SD DVD format will really go away. There is an economic place for 480/720 video and 2.0 audio for manufacturers and studios. My daughter’s “Barbie Fairytopia: Mermaidia” DVDs for instance should not be released in 1080 with 5.1 surround. Similarly, there are movies that have been released in HD DVD that should *not* be released in HD DVD. Bullitt for instance looks aged and has *only * a 2.0 audio track. I still shudder to think that they actually released it with 2.0 - why even bother? Additionally, I would rather watch an SD movie with some kind of 5.1 mix and upconvert the video than watch an HD movie with a shit 2.0 audio track; yes, Bullitt pissed me off that much.

Accordingly, I think the marketplace is headed to dual sided dics: HD on one side, SD on that other. HD DVD is perfectly suited to this production model as SD DVD and HD DVD can be manufacturered in the same fab facility. Soon you will see studios abandon standalone SD movies and release the dual sided format movies. (I have loaned out my Miami Vice and The Departed to friends sans HD DVD players). HD DVD is the only HD format that accommodates the release of movies in this dual format.

Additionally, movies which are rich in audio complexity and most new movies should be released in an HD Format. With the capabilities of HD DVD manufacturing, I think more and more studios will start leaning towards that format. Other movies, however, will retain their SD release and *no* HD release.

The big moves for the HD DVD format will be which stuidos sign on and whether HD DVD can score the Star Wars trilogy for its format. Dont get me wrong, the entire Star Wars series in its SD format is actually pretty awesome when upconverted and the surround mix on the SD release is great. But I want it in native 1080. I also want to listen to the movie in TrueHD with a THX certified mix. HD DVD is also a better format for Star Wars because of the interactivity. Star Wars fans, like myself, are notorious for delving deeper into the story. HD DVD and its HDi format provide this interactivity. BD cannot. If HD DVD can score Star Wars BD is dead.

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